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Posted by on Dec 12, 2012 in Economy, Guest Contributor, Politics | 1 comment

In Defense of Incrementalism

Jonathan Chait writing in New York Magazine about Senator Marco Rubio’s “dodges” on the budget deficit and incrementalism as it relates to immigration reform:

On the budget, Rubio delivered the Republican weekly radio address, and his message was more of the old-timey religion: We must get the national debt under control. Tax increases will not solve our $16 trillion debt. Only economic growth and a reform of entitlement programs will help control the debt.

This is the classic Republican metaphysical dodge, which not only argues for keeping taxes as low as possible but refuses to acknowledge that revenue bears any relationship at all to deficits. Deficits equal spending! Two legs bad, Reagan good!

On immigration, meanwhile, Rubio is carefully positioning himself to oppose any potential deal. He is not coming out and immediately throwing his body in front of the legislative train. Rather, he pleads that we must not try to do everything at once and should instead try to reform immigration “step by step.” Of course, “step by step” is exactly the catchphrase Republicans used to oppose health-care reform. It’s a way of associating yourself with the broadly popular goal of reform while giving yourself cover to oppose any particular bill that has a chance to pass. You’re not against reform, you’re against this reform. It’s too much, too fast.

I am not enamored of Rubio as some on the right — not enough seasoning to be thinking seriously of a run for president. But Chait is misrepresenting Rubio’s position when he accuses him of refusing “to acknowledge that revenue bears any relationship at all to deficits.” Really? Raising the tax rate on the rich will bring in $80 billion a year. Last time I checked, that was more than a trillion bucks short of closing the deficit gap. It may be a good start, but unless Chait wants to jack up Middle Class tax rates as well, increased revenue is not going to come close to giving us significant deficit reduction. And it’s dishonest to accuse Rubio of refusing to say that revenue bears no relationship “at all” to deficits. That’s silly. Chait is chastizing Rubio for not agreeing with him — a sin among some on the left I suppose but hardly cause to charge the Florida senator with dishonesty.

Rubio is saying what most conservatives are saying; we don’t have a revenue problem, we have a spending problem. The problem did not suddenly appear on Obama’s watch — the Bush administration did enough damage in 8 years — but the recession has worsened it. Chait appears not to acknowledge this fundamental issue and substitutes hyperbole for a reasoned analysis of Rubio’s remarks.

We are not going to bring the deficit down all at once. We can’t deal with the problem by only raising taxes, nor are we going to be able to grow our way out of the problem. Careful, prudent cuts in military and social spending — including trying to get a handle on entitlements whose unfunded liabilities promise catastrophe in the near future — along with a tax policy that eliminates much of the corporate welfare in the tax code and limits deductions will, over several years, do the least amount of harm to the economy while gently lowering the percentage of GDP spent by government.

In other words, the best path would appear to be incrementalism — what Chait dismisses as a dodge by Rubio, but which represents the most responsible, the most prudent means of governance. And the Affordable Care Act is a perfect example.

Incrementalism applied to the health insurance crisis would not only have improved health care and access to health insurance by most Americans, but have been politically palatable to at least some of Obama’s opposition. In 2009, the president faced a crisis that was not addressed by the Bush administration; 15-18 million Americans needed health insurance, wanted health insurance, but couldn’t afford it.* There were also a couple of million Americans with pre-existing conditions who insurance companies refused to cover, or whose coverage cost so much only the very rich could afford it.

The choice: either address the immediate need to get insurance for these at risk Americans or write a mostly unnecessary, ruinously complex, 2500 page monstrosity of lawmaking that, when implemented next year, is going to cause massive upheaval, confusion, and worry for tens of millions of Americans. Choosing the latter was imprudent and an insult to good governance.

There may be no more important civic virtue than prudence. Jefferson wisely said, “The same prudence which in private life would forbid our paying our own money for unexplained projects, forbids it in the dispensation of the public moneys.” Jefferson was well aware that imprudence in the use of public monies led to unintended consequences — the bane of good governance. When an exasperated Nancy Pelosi told a reporter in a response to a question of what exactly was in the ACA, “We have to pass the bill so you can find out what is in it,” the speaker of the House was not making idle chatter. She was dead serious and to this day, we still haven’t grasped the enormity of what Congress has wrought in “reforming” health insurance and the health care industry.

What affect will mandated coverages have on people’s insurance policies and their cost? No one knows. How many companies will drop coverage for their employees? No one knows. What will dumping 15 million new Medicaid patients on the health care system mean? No one knows. How many doctors and hospitals will refuse to accept new Medicare and Medicaid patients because of the reduced reimbursement rates? No one knows.

These are just some of the obvious questions. The real problem is that we don’t even know all the questions to ask much less answer any of them. This is the definition of imprudence and raises the possibility that the Affordable Care Act, on balance, will be a detriment to our health care system rather than a plus.

Incrementally addressing the crisis that faced us in 2009 would have been the prudent thing to do. Covering as many Americans as possible by expanding Medicaid and subsidizing insurance for many more economically marginal citizens would have been sufficient to address the immediate needs of the people. We should have left the rest — the 108 new federal agencies, boards, panels, and commissions that are being created by this “comprehensive” legislation — for a later date when we’ve had time and experience to assess the impact on the health care system — and the federal budget — of covering millions of new patients.

The Democrats have a point that Republican opposition to almost all of the ACA meant there was, in a practical political way of speaking, no way to achieve bi-partisanship. But I submit that there were signs that the few moderates left in the party would have been glad to sign off on a less ambitious bill. Politics aside, however, this is a badly written piece of legislation that no self-respecting lawmaker should have voted for.

I reject the argument that incrementalism would have been “too hard” to accomplish and the easier course was to affect the changes all at once. Altering society in such a fundamental manner should be hard — must be hard. Force feeding such enormous changes without the slightest hint of what much of the real world impact on people’s lives and pocketbooks will be is irresponsible.

To a lesser extent. much the same could be said of the financial services reform bill — Dodd-Frank. Here too, there were problems that needed to be addressed — that could have been addressed — without resorting to creating a gargantuan new agency, the Consumer Financial Protection Bureau. Besides, the real problems regarding “Too big to Fail” and the transparency of the derivatives market were inadequately addressed.

Chait may wish to argue against incrementalism in the abstract. But he doesn’t. He dismisses the idea as just more politics from Rubio and the Republicans. I have a feeling in 2014 when the ACA has caused the kind of mass confusion and chaos that it is sure to do that many liberals like Chait might rethink the efficacy of incrementalism and it’s benefits to the concept of good governance.

*The idea that 30, 40, or 50 million Americans were uninsured — depending on how hysterical the partisan who talked about the need for the ACA was — was always a dishonest figure. There are millions of “young invincibles” who didn’t want insurance at the prices they could get it at. There were perhaps 14 million Americans who, at any one time, are between jobs but would be virtually assured of getting health insurance from their jobs once they were employed again. That makes the real uninsured figure below 20 million and perhaps fewer than 15 million.

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